TSMC's bullish outlook cheers Taiwan stocks, government (updated)

Quanta Computer

19/01/2024 04:22

(Recasts, adds other stocks rising)
       TAIPEI, Jan 19 (Reuters) - Taipei-listed shares of
Taiwanese chipmaker TSMC soared on Friday after the company gave
a bullish outlook for the year on the back of the boom in
artificial intelligence (AI), cheering tech stocks at home and
abroad.
    Taiwan Semiconductor Manufacturing Co Ltd (TSMC)  2330.TW ,
the world's largest contract chipmaker and a major Apple Inc
 AAPL.O  and Nvidia  NVDA.O  supplier, on Thursday projected
more than 20% growth in 2024 revenue on booming demand for
high-end chips used in AI.
    TSMC's shares rose as much as 6% on Friday in Taipei, after
its' U.S. listed stocks  TSM.N  closed up almost 10% overnight,
with the S&P 500 approaching record highs as AI optimism drove
gains in Nvidia and other chipmakers.
    The outlook also boosted the broader Taipei market  .TWII ,
which rose 2%, as well as other Taiwanese tech firms. 
    AI server makers Quanta  2382.TW  and Wistron's  3231.TW 
stocks jumped too. Quanta rose around 8%, while Wistron leapt
some 9%. 
    TSMC's announcement that it was evaluating building a third
fab in southern Taiwan's Kaohsiung city to produce advanced 2
nanometre chips also gave a boost to the government.
        Opposition politicians have repeatedly criticised the
government for allowing TSMC to build fabs overseas and "hollow
out" the sector, and have said some investors believe Taiwan is
a risky place to expand production given tensions with China.
    Economy Minister Wang Mei-hua told reporters on Friday
TSMC's domestic expansion plans showed the fallacy of such
claims. "Investment in Taiwan will definitely increase," she
said.
    Both TSMC and the government have repeatedly said the most
advanced chips will continue to be produced in Taiwan.
    Kaohsiung Mayor Chen Chi-mai said the city had been working
hard to ensure stable and reliable water and power supplies for
TSMC's factories.
    "Its key strategy is still to focus on Taiwan," he told
reporters.
    TSMC is such an important company for Taiwan's
trade-dependent economy it is widely referred to as "the sacred
mountain protecting the country".

 (Reporting by Ben Blanchard; Editing by Tom Hogue and Miral
Fahmy)
 ((ben.blanchard@thomsonreuters.com;))